Japan opposition LDP pledges 2 pct inflation accord with BOJ

November 20, 2012|Reuters

TOKYO, Nov 21 (Reuters) - Japan's opposition LiberalDemocratic Party (LDP), which is likely to win a Dec. 16election, has pledged to set a 2 percent inflation target, mediareported on Wednesday, to encourage the central bank to expandmonetary stimulus more aggressively.

The LDP will also consider revising laws governing thecentral bank to increase cooperation with the government onpolicies ranging from debt management to the possible purchaseof foreign bonds, Japanese newspapers reported.

A draft of the LDP campaign platform made no mention ofleader Shinzo Abe's controversial proposal that the BOJ shoulddirectly underwrite bonds issued for public works projects.Questions about the central bank's independence are likely to bea focal point of election campaigning.

The platform pledges to spend money to improve naturaldisaster management and evacuation zones following last year'sdevastating earthquake and nuclear disaster, the draft said.

The LDP also said it would conduct fiscal policy "moreflexibly" for the next two to three years and would compile alarge stimulus package next year, newspapers reported. The LDPalso wants tax breaks for low-income earners after a sales taxhike next year.

On energy, the LDP said it would reach a conclusion withinthe next three years about whether to restart idled nuclearpower plants, according to the draft.

The LDP's platform calls for increased spending on maritimedefence and for the government to increase its control of agroup of islands that both Japan and China claim as their own.

The election for parliament's lower house is expected tousher in Japan's seventh prime minister in six years, with the LDP likely to return to power after three years in opposition.

Some economists doubt the election will immediately end apolicy stalemate that has plagued a country struggling to copewith an ageing population, a declining manufacturing sector andthe emerging power of China.